Cefic predicts marginal growth European chemical production

Cefic predicts marginal growth for European chemical production

11:36 AM, 30th December 2015
Cefic predicts marginal growth for European chemical production

BRUSSELS, BELGIUM: The European chemical industry is forecasting modest growth in domestic and worldwide demand for European chemicals for 2016, with challenging times ahead in the long-term.

This forecast comes in the face of declining demand from key industries, competition from third countries and economic slowdown in important export markets.

Overall, Cefic expects around 1 percent growth in EU chemical production in 2016, following the similarly sluggish rates of 0.5 percent in 2015. The environment for the chemical business in 2015 proved challenging: manufacturing growth in the European Union grew only moderately, while construction growth was slower than expected in the current low-interest rate environment.

Only the automotive industry over performed in 2015, impacting demand for certain chemical products. Looking ahead, growth in industries such as food and beverages, and construction are expected to offset relatively any downturn in the automotive sector.

“Although we are forecasting a slight uptick compared to the previous year, the conditions under which this modest growth took place – such as low oil prices and a favourable Euro/USD exchange rate - cannot be expected to last indefinitely,” said Hubert Mandery, director general, Cefic.

He emphasised the need for EU policy makers to support the competitiveness and innovative capacity of the European chemical industry.

In 2016, the world economy is expected to grow only moderately:

1) Growth of gross domestic product in the European Union is assumed to be stable with some regional differences.

2) Although growth in European manufacturing might be somewhat weaker next year due to softer growth in the automotive industry – following two years of strong recovery – other industries are expected to strengthen and should balance demand for chemicals.

3) European chemical exports are supported by favourable Euro exchange rates and slightly stronger global growth in the manufacturing industry, and finally by consumer demand.

© Worldofchemicals News

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